NU Online News Service, Dec. 7, 3:21 p.m. EST
Property and casualty insurance market capacity is expected to remain strong and broad coverage should remain available for most industry sectors through this year and into 2010, according to an industry report from Aon.
The Chicago-based insurance brokerage's findings were contained in its "Quarterly Market Overview, Summary and Forecast, Property, Casualty, Directors & Officers Lines U.S. Q3 '09," which reported most lines of business were flat to soft in the third quarter of this year.
Generally, the pricing and buying decisions that the industry experienced in the third quarter are expected to continue into 2010, the report said.
After experiencing two quarters of hardening this year, property rates were flat overall with an increase of 0.2 percent thanks to a quiet catastrophe season and insurer's profitability.
On the casualty side, rates remained soft with rate decreases in the low single digits except for auto liability, which remained flat. These conditions are expected to continue into next year. This could change, said Aon, if there is some market changing event such as a major act of terrorism or natural catastrophe.
Aon said 2009 is expected to be the first back-to-back three year decline in net premiums for casualty risks since 1930-1933.
Directors and officers liability insurance rate decreases averaged negative 2.7 percent in the third quarter and are expected to stabilize short term, Aon said. The exception is of "insureds who have elevated company-specific risks or who are in an industry facing challenges."
The majority of insureds purchased the same level of aggregate limits for property, umbrella/excess liability and D&O liability. This trend is expected to continue, according to the brokerage.
For property, casualty, and D&O, more than 80 percent of clients maintained the same deductibles and retentions in the third quarter, which is also expected to continue into next year.
The full report is available at www.aon.com/quarterlymarketoverview
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